To understand why it is irrational to expect oil prices to increase in the face of depletion, consider the analogy of human aging. Aging entails progressively depleting strength similar to what is going on with natural resource extraction. Imagine a man doing manual labor. In his prime he is good at it, but as he grows old his productivity obviously declines, and so does his earning power in most cases. It would be delusional to expect a 90-year-old man to be paid more per hour for hard physical labor than a 20-year-old. Yet bizarrely, this is what we expect from oil. We expect oil to be worth more as it becomes scarcer and harder to extract and returns less and less net energy on our investments. I used to believe so myself before I got into the peak oil scene, but now I see how foolish this entire line of reasoning is. High oil prices will not save us from peak oil. On the contrary, too low oil prices will be the proximate cause of peak oil, and it is happening now.
To take the analogy further, consider a workforce of aging workers, with less and less vigorous young men to replace them. Attempting to power industrial civilization on shale oil and tar sands and the like -- or renewable energy, for that matter -- would be equivalent to expecting 90-year-olds to do all the work, and be paid more for it than we used to pay men in their primes. It is impossible, and things fall apart. Unfortunately, this is our immediate fate.